"The social system of private property and limited government is the only system that tends to debarbarize all those who have the innate capacity to acquire personal culture."
~Ludwig von Mises

Dec 17, 2010

Richard Bernstein says investors are in "denial" about bull market

Markets go through four phases. The first phase is a period of denial, where people say, it can't happen (stocks rising despite risks), it won't happen, and if it's happening it can't continue. That's where we are in the U.S. The second phase is acceptance, like OK, I should probably be (buying stocks). The third is what I call the brave new world, things are never going to change, everything is wonderful. The fourth phase is the bear market.

In the U.S. we're in phase one. The fact that the stock market is up more than 80% from its trough, and people refuse to believe that there's actually a bull market underway, reflects that we are in the denial phase.